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Chicken Meat in Australia: Outlook to 2017–18

12 March 2013

Over the last decade, Australian chicken meat industry output has increased strongly at around four per cent annually and this trend is forecast to continue throughout the outlook period, according to Clay Mifsud and Caitlin Murray in the latest quarterly 'Agricultural Commodities' report from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

The Australian chicken meat industry has experienced strong growth, with
production increasing on average by around four per cent a year over the past 10 years.
This pattern of growth is expected to continue over the short to medium term
(to 2017–18); Australian chicken meat production is forecast to increase by a further
three per cent in 2013–14 to 1.08 million tonnes. Projected growth in chicken meat
production over the next several years is largely in response to increased consumer
demand, as retail prices are expected to remain substantially lower than for beef,
lamb and pork. By 2017–18 chicken meat production is projected to increase to
around 1.2 million tonnes.

The chicken meat industry in Australia is highly concentrated; two major processors
supply around three-quarters of the domestic chicken meat market. Chicken meat
production accounts for around 95 per cent of total poultry production, with the
remainder comprising duck and turkey meat production. The chicken meat industry
is more vertically integrated than other livestock sectors. The predominant business
model is one in which the processors provide both day-old chicks and feed to growers
contracted to raise the chickens over about five weeks.

The Australian chicken meat industry continues to import new genetic strains
that enable producers to improve numerous traits, including meat yield per bird,
feed conversion efficiency and disease resistance. Over the 20 years to 2011–12,
the average meat yield per bird increased by an average of one per cent a year to
1.9kg. This trend is expected to continue over the medium term.

Chicken meat consumption is forecast to increase by one per cent in 2013–14 to
45kg per person, as it remains price-competitive against substitute meats.
In comparison, per person consumption of beef and veal, pig meat and sheep meat
is expected to average 34kg, 27kg and 10kg, respectively,
in 2013–14. Over the medium term, per-person consumption of chicken meat is
projected to grow to 47kg by 2017–18. Chicken meat is projected to maintain
its position as the most consumed meat in Australia.

Australian meat consumption, per personf ABARES forecast.

Australian chicken meat exports are forecast to fall in 2012–13, reflecting import
bans several trading partners placed on Australian poultry. On 9 November 2012, the
Department of Agriculture, Fisheries and Forestry informed the World Organisation
for Animal Health that a case of avian influenza virus (H7N7) had been detected at
an egg farm near Maitland, New South Wales. By 20 December 2012, the affected area
had been depopulated, decontaminated and disinfected. However, during this period,
importers of Australian poultry, including Papua New Guinea, the Philippines and
Indonesia, placed temporary bans on Australian exports because of concerns about
the safety of Australian chicken meat.

In 2013–14, Australian chicken meat exports are forecast to resume growing,
assuming withdrawal of the temporary bans currently imposed. While export
shipments are projected to increase over the medium term to meet demand
growth in the Asia–Pacific region, most Australian chicken meat production will be
consumed domestically.